11 April 2007

ConocoPhillips announced its support for a mandatory national framework to address greenhouse gas emissions and has joined the US Climate Action Partnership (USCAP), a business-environmental leadership group dedicated to the quick enactment of national legislation to require significant reductions of greenhouse gas emissions.

We recognize that human activity, including the burning of fossil fuels, is contributing to increased concentrations of greenhouse gases in the atmosphere that can lead to adverse changes in global climate.

In addition to taking actions in our own businesses, we believe it is important that business should step forward to help devise practical, equitable and cost-effective approaches to address the concentration of greenhouse gases in the atmosphere at both a national and international level. To that end, we have joined USCAP in support of the development of a mandatory national regulatory framework to reduce the level of greenhouse gas emissions. Further, we believe that a mandatory national framework that links to international programs is most likely to achieve meaningful impact on global greenhouse gas emissions.

—Jim Mulva, chairman and chief executive officer

Mulva said that such a framework should be transparent, clearly communicate the cost of carbon to consumers, be structured to avoid increasing the volatility of energy prices, and encourage energy efficiency.

It also should be paced to match the speed at which technology can be developed and deployed, in order to avoid undue impact on the economy including any impact on the number and location of jobs. The most likely and prudent approach will result in a slow, stop, reverse pattern.

Yesterday, ConocoPhillips announced it will establish an eight-year, $22.5 million research program at Iowa State University dedicated to developing technologies that produce biorenewable fuels. An area of interest for the company is the distributed use of fast pyrolysis to produce a bio-oil that could then be upgraded in refineries to transportation fuels. (Earlier post.)

Comments

While this seems like a positive development, the only subject mentioned that might be pertinent to actually reducing greenhouse gas emissions was biorenewable fuels. While this would probably have some positive impact, the net reduction, if any, must be balanced with the impact on the nation's and world's food supply and the environmental impact of expanding the amount of land used to produce feedstocks for these fuels.

Oil companies need to invest in transitioning away from fossil fuels and not simply towards biofuels. Biofuels will contribute a small net amount to the reduction of fossil transportation fuels while having a big impact on remaining areas that have not as yet been impacted by agricultural or other development. Oil companies plan to spend tens of billions of dollars over the next decades on exploring, discovering, and developing oil fields that will require higher and higher expenses to gather less and less oil. Investing all that money while just increasing the rate of inflation is shortighted but I guess is appropriate for in a growth oriented world which mainly just thinks about the next quarter's stock price and not the substainability and long term health of humankind, animalkind, and the planet.

In the short run, how does an oil company reduce its greenhouse emissions. The best way would be to take steps to reduce the demand for its product. When that reality hits the like of Conoco Phillips between the ideas, I wonder how supportive they will with respect to mandatory carbon emission reductions.

Note that the CEO wants any framework for carbon reductions to be paced with technological change. That is simply not possible and demonstrates the hollowness of this commitment.

Most encouraging is the quality of NGO partners who are good advocates. Conoco should be recognized for its acknowledgment of the need to transition to sustainable energy. There is a whole lot of opportunity for these companies in the renewables market IF they look beyond short term. Biofuel and lower consumption is needed right now to help make that transition.

But huge investment in petro drilling/exploration projects would seem to negate the acknowledgment in the first place.

You could say that since oil prices have gone from under $20 to over $60 per barrel, they can talk conservation. However, I like seeing oil companies talk about biofuels, because if we are going to use them we need distribution and they control the stations.

there are developments in DME in China today!
We see great potential for DME as a clean alternative fuel . The present diesel oil is a major source of air pollution from diesel engine of trucks and busses in large city like Tokyo. The potential market of diesel oil substitute is larger than LPG. DME is one of ideal fuel for diesel engine. DME vehicles were demonstratively manufactured in Japan, China and Korea and their driving test already started. Practical durability fleet test of a DME truck is under going in Japan.

We are pleased to organise a conference on China taking the lead in the DME market in production from coal and Japan and Korea activities.

If you would like to know more on COAL to Syngas to DME developments, join us at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:

DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
By:
National Development Reform Commission NDRC
Ministry of Energy for Mongolia

Production of DME/ Methanol through biomass
gasification could potentially be commercialized
By:
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.

Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe

Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation